UNFCCC COP21 in Paris, economics and why the planet is heating up regardless of climate talks

The world gets more and more divided into believer and those who have replaced religion by science. While both seem to be stuck in light of different global crises, economics can’t change an imperfect world either.

Being a nihilist with a rather pessimistic view on current world politics, I often have my doubts about what I’m doing and where I should be heading. From friends I learn that I’m not alone in this. Interestingly enough, I found one of the best answers to a rather pessimistic situation in economics. Reading what James M. Buchanan famously said in 1966 [1], namely that the art of the economist was not to lean to judgements of right or wrong, win or lose, all or nothing, or yes and no, but to adjust, coordinate conflicts and thus to achieve mutual gain, I recognized a concept that has guided environmental management in face of uncertainty for decades and one that sounds right to me: that of doing, observing, analyzing and eventually adapting.

Toasting to the victims of war and terror? President Obama and Putin at the UN General Assembly (Source: http://www.businessinsider.com/obama-putin-un-toast-photo)

Not long ago, a picture made its way around newspapers. It showed US president Obama toasting with Russia’s patriarch and suppressor Putin. Somewhat surprisingly, the comments to this picture all concerned the expression on Obama’s face. Now, I don’t know how much about economics journalists know, nor if Mr Obama and Mr Putin are experts in the art of economics. What is clear is that if they applied them, their focus would be on other issues than on sipping champagne and making faces.
Dear readers, seeing that picture didn’t you wonder what representatives at the US General Assembly have to toast to, in times that see millions of people on this planet fleeing from war and terror, many of them dying on a ship, drowning in the Mediterranean or suffocating to death in a truck in Austria? Well, the fact is that world leaders most likely don’t give a sh?!* for the lives of the victims. Rather, Putin and Obama toasted to the next meeting in Paris, where they will meet with thousands of representatives of all color and rank to discuss climate warming.

I don’t know whether climate change refugees or any other refugees will be present at the UNFCCC COP21 in Paris. In fact, it doesn’t really matter, because regardless of whether you are an optimist or a pessimist, the decisions for COP21 have already been taken. In fact, they have been taken a long time ago. Global warming is a fact that has been known for decades. Likewise, the remedies have long been discovered as well. Economists and thinkers who care and understand about economics, such as Nicholas Stern, Johan Eliasch or Ross Garnaut, have long shown how the issue of global warming can and must be tackled. Not surprisingly and given that we all participate in the same global market economy, it must be tackled by integrating climate change in this same market. Or in other words, setting a price on negative impacts (e.g. carbon emission) and on positive actions (e.g. conservation of ecosystem services) will help to solve the problem. The market will by itself regulate the negative impacts of carbon emissions and world leaders would indeed have reasons to drink champagne.

Hearing that, you probably think ‘if it were that simple, why don’t we do it then?’ Well, also that can be answered by economics. Unfortunately, good economics is all based on perfect markets but markets are not perfect. If our governments solved the problem of climate change, they would have no reason and now budget for annual travels around the globe. In reality, governments, authorities and other powerful people have manipulated and distorted markets ever since with focus on optimizing their personal profits at the expense of society and the environment. While you ride your bicycle to curb carbon emission, governments all over the world still subsidize diesel that benefit their clans and friends in different sectors. Whereas the Vietnamese government invests in bigger fleets that will target at already over-fished fish stocks, it taxes the import of bicycles, simply due to the fact that authorities make more money from buying big boats while bicycles are imported by small or medium sized enterprises.

When even state attorneys and judges in Zurich, who are meant to investigate corruption and the faulty practices of the FIFA, play the wrongful rules of an elite circle accepting presents from their clients rather than investigating their crimes, how can we then expect the world to be perfect? You don’t need to be an economist to understand that when thousands of representatives from all over the planet will travel to Paris in late November, they don’t do so with the aim to curb global warming. Just as with other UN gatherings, they will take the opportunity of their annual catching-up to toast at your expenses and make funny faces to keep photographers and journalists busy. Apart from that, they will meet friends, will network a bit and of course, do some shopping in Paris’ famous boutiques. Regardless of whether you care about economics, hoping that our world leaders will do something to halt climate change is like praying for the Messiah. It doesn’t hurt, but it doesn’t solve the problems on this planet. What we need is policies that benefit society, not champagne for the few. To conclude with economic theories, it’s time to adapt the deficient rules of a faulty game.

[1] I summarize it rather than to quote all his words